TRALAC - Trade Law Centre

South Africa: Textile Industry Could Get Respite From China

Wednesday, 15 December 2004

Source: Business Report (South Africa)

With China expected to flood the world with its cheap products after the removal of quotas on textiles and clothing exports at the end of this month, there was a chance that South Africa could avoid a Chinese juggernaut as the world's largest producer of textiles shifted its focus to the world's richest markets, a top local trade unionist said yesterday.

"There may be an irony in that with China having greater access to the US and the EU markets, it may be less interested in focusing on the South African market, which could be a respite for the local industry," said Ebrahim Patel, the general secretary of the Southern African Clothing and Textile Workers' Union.

"However, the removal of quotas will consolidate China as the major supplier of clothing and textiles across the world."

The quotas that have been used by developed nations to protect their textile and clothing producers from Asian manufacturers will be phased out, thanks to a decision taken 10 years ago by the World Trade Organisation to scrap the use of these instruments because of their ability to restrict free trade.

However, it is feared that the Chinese comparative advantage in producing low-cost textiles could result in a glut of Chinese exports that could kill clothing industries in less competitive countries. South Africa has no quotas that protect its industry.

Patel said some of the local fashion producers had moved up the value chain by producing high-quality products and had improved their speed in which they delivered to the world markets.

"China's quality is not equal to South Africa's, but there has been an improvement in China's quality. And also, it takes two months for South Africa to deliver the jacket you are wearing now, but it could take China six months to deliver the same jacket."

The preferential market access to the $11 trillion (R63 trillion) US economy that South Africa was enjoying under the African Growth and Opportunity Act was likely to be eroded as Asian exporters take advantage of the market gap opened by the dismantling of quotas.

Competition from Chinese imports and the strong rand have led to numerous factory closures and job losses. And the sector has been told by the government to strive for global competitiveness or face being swallowed up by more competitive nations.

Jack Kipling, the president of the Clothing Trade Council of SA, said the local industry was in a better position compared with other developing countries because it was less reliant on the export market for revenue generation.

"South Africa is in a better position than many other countries for the simple reason that the South African clothing industry only exports 20 percent of its output."

"The clothing industries in many other countries are almost entirely reliant on exports to the US and EU. Swaziland and Lesotho are examples close to home."



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

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